China Construction Bank has refused a loan of 200 million yuan (HK$187.48 million) to one of Shanghai's richest property tycoons as part of a nationwide effort to reduce lending to the real-estate sector, according to a newspaper report yesterday. The Oriental Morning Post said the bank's Shanghai branch had turned down the application from Ye Lipei, chairman of the Super Ocean Group, for the loan towards a project in the financial district of Lujiazui in Pudong, in line with document 121 issued by the People's Bank of China (PBOC) in mid-June, following scandals involving illegal loans to two other property tycoons in the city. Officials of the bank and the Super Ocean Group declined comment. The newspaper said the bank had originally thought well of the project but rejected the loan at the last minute, together with many other such applications during the past four weeks. The PBOC document demands tighter controls on lending to 'prestige projects' and those which aim to glorify particular officials, projects that pose as parks and campuses but are ordinary real-estate, those on collective land, those outside official plans and those that are illegal and improper. Mr Ye was named the sixth-richest person in China with a personal fortune of US$540 million by Forbes magazine last October. However, he claimed the Forbes data was inaccurate and, like other wealthy Chinese, he did not welcome publicity. Mr Ye, 59, was born in Shanghai and worked as a mathematics teacher before emigrating to Australia in 1979, where he lived for 10 years and became an Australian citizen. His principal business was trading textiles. In 1989, he started to invest in the real-estate business in Shenzhen and from the early 1990s in Shanghai. People are closely watching to see if the government extends its crackdown against illegal property activities in the city beyond the two tycoons arrested in May - Chau Ching-ngai and Qian Yongwei. Both men were accused of borrowing money from state banks under false pretences, allegedly for property development but actually to invest in the stock market. The city government is eager to put the scandals behind it and revive interest in its property market - an economic engine. On Tuesday, the first group of Hong Kong developers arrived in Shanghai since the signing of the closer economic partnership arrangement, which allows them to set up wholly owned investments in the mainland property market.